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Budget battle: 3 plans on the table, what now?

Thursday - 4/25/2013, 2:00pm EDT

NANCY BENAC
Associated Press

WASHINGTON (AP) -- First the Republican-led House approved a federal budget that's heavy on spending cuts. Then the Democratic-controlled Senate approved one that leans more toward tax increases. Then at last, President Barack Obama put out his own budget plan, two months late, coming down someplace in between.

Sounds like progress, right? Check back on that.

The competing proposals are more likely to produce just more budget gridlock.

There are kids in preschool who hadn't been born when Obama and congressional Republicans started arguing over how to make meaty cuts in the federal budget deficit and put the country on a more sustainable fiscal track. And those kids could be well into elementary school with the two sides still in search of a "grand bargain" that cuts government spending in a big way for decades to come.

Still, the president's proposed budget for the year that starts Oct. 1 could provide a framework for talks to find a mix of spending cuts and tax increases that members of Congress feel they can stomach -- and still get re-elected.

If something truly grand is out of reach, might a so-so bargain be doable?

A primer on the latest fiscal skirmishes and the broader dynamics in Washington's long-running budget battle:

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2,420 pages.

There's something for everyone to hate in Obama's spending plan -- and some deficit hawks think that's a good sign.

The president's budget is aimed at reducing future deficits by $1.8 trillion over the next decade through a mix of modest spending cuts and $1 trillion in higher taxes. It replaces $1.2 trillion in previously approved across-the-board cuts and includes reductions in the growth of programs that politicians are typically loath to mess with -- programs like Social Security and Medicare.

It's a far cry from the good old days when budgets were feel-good documents larded up with tax cuts and pricey new programs.

Obama's budget does contain a few new initiatives: money to fix highways, bridges and transit systems, financing for high-speed rail projects and preschool for all 4-year-olds among them. The federal tax on cigarettes would nearly double to $1.95 per pack to help pay for the new stuff.

But overall, the focus is on making do with less.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt, says the fact that the president's plan makes so many people squirm is evidence that it's a serious effort to do something tough.

"The nature of fiscally responsible reforms is that they are filled with things that everyone is going to hate," she says. "They're hard."

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Ready, aim ...

Reaction to Obama's budget laid bare the same partisan differences that have prevented legislators and the president from reaching a big budget deal all along. Republicans are adamantly against the new tax revenue in the president's proposed budget and say they want to rein in spending on entitlement programs; liberal Democrats are irked that the president's budget would make nicks in Social Security and Medicare and insist that tax increases need to be a bigger part of the mix.

Those differences aren't going anywhere -- and will only become more pronounced as the 2014 elections near.

Even the president doesn't appear to be under any illusion that a large fiscal deal is imminent -- or even within distant reach.

"He did indicate a desire to work with us," said Sen. Orrin Hatch of Utah, one of the 12 Republican senators who had dinner with Obama at the White House on the day he released his budget. "But he also indicated that it's very tough for him because of his side and their particular approach to things. He made it very clear that it's going to be very difficult to bring both sides together, that he has had difficulty doing that."

There's a risk that Obama's attempt at compromise ends up being "a middle path to nowhere," in the words of Tony Fratto, a former Bush Treasury and White House official.

But there is still a chance that Obama's offer -- which keeps intact the contours of his previous "grand bargain" negotiations with House Speaker John Boehner -- could be the basis for summertime talks that actually produce something.

Republican Paul Ryan, chairman of the House Budget Committee, has said it's "the first time in this presidency" that he felt cautiously optimistic about a bipartisan budget deal.

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What now?

In theory, the next step is for congressional negotiators to get together and produce a compromise budget that draws on what the House, Senate and president have proposed.